Graphic Design Inc. had a beginning balance of $2,000 in its Accounts Receivable account. The ending balance of Accounts Receivable was $2,400. During the period, Graphic Design recognized $40,000 of revenue on account. The Salaries Payable account has a beginning balance of $1,300 and an ending balance of $900. During the period, the company recognized $35,000 of accrued salary expense.

Required

a. Based on the information provided, determine the amount of net income.

b. Based on the information provided, determine the amount of net cash flow from operating activities.

c. Explain why the amounts computed in Requirements a and b are different.